A simple guide to getting your next home loan after selling creatively
Most sellers can still buy another home. Underwriting depends on the loan type and the lender.
Lenders mainly want proof that the old house is being covered (lease or occupancy agreement + proof of deposits).
Always confirm rules with your lender because guidelines change.
When you move out of your home and someone else starts living there, lenders want proof the old payment is being covered. They usually ask for:
Lenders often count a portion of the income (such as 75 percent) to be safe.
Conventional loans often let you turn your old home into a rental and still buy a new one.
What they may need:
VA loans often allow you to convert your old home into a rental.
They may need:
FHA often has stricter patterns.
Lenders may look for:
USDA loans can be difficult to get if you still own another property. Guidelines often do not allow for owning another home while getting a USDA loan.
Q: Can sellers still buy another house if they do creative finance?
A: Yes. Most sellers can still qualify for a new mortgage. The buyer's payment on the old house typically offsets the debt on the seller's debt-to-income ratio.
Q: What do lenders usually ask for when the old mortgage stays in the seller's name?
A: A signed lease or occupancy agreement and proof of deposits showing the payment is being received.
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